Cabinet secy calls meet on India-US pharma issue

Cabinet Secretary Ajit Seth has called a meeting of top bureaucrats on Monday to chalk out a strategy to deal with the intellectual property rights (IPR) issues being raised by the US.

The meeting comes in the backdrop of the US industry, particularly, from pharmaceuticals sector and trade lobbies putting pressure on their government to put India under ‘Priority Foreign Country’ list for IPR, which may lead to trade sanctions on Indian firms by America.

Indian Ambassador to US S Jaishankar has suggested that the Indian government should engage with US pharma firms to deliberate on the matter. American companies are alleging that Indian IPR regime is not compliant with international norms and discriminates US firms.

"Foreign Secretary Sujatha Singh has requested the cabinet secretary to convene a meeting on the issue and the meeting is scheduled for Monday," sources told PTI.

According to sources, as part of trade sanctions, the US may consider withdrawing the benefits under the scheme of Generalised System of Preferences (GSP), which provides reduced tariffs for Indian goods entering US markets.

"The withdrawal of GSP benefits may impact exports of MSME sector to the US. However, the move would not impact Indian exporters much," they said.

Earlier, India has made it clear that it would drag the US to WTO if America includes it in that list.

Officials have said the demand is completely unfair as India’s IPR regime is compliant with global laws, including the World Trade Organisation (WTO).

Under the US Trade Act, a Priority Foreign Country is the worst classification given to those which deny adequate and effective protection of IPR or fair and equitable market access to the US persons relying on IPR protection.

The Obama administration had been strongly criticising India’s investment climate and IPR laws, especially in the pharmaceuticals and solar sectors.

American pharma companies had objected to India’s move to issue a compulsory licence in March, 2012 to Hyderabad-based Natco Pharma to manufacture and sell cancer-treatment drug ‘Nexavar’ at a price over 30 times lower than that charged by patent-holder Bayer Corporation.

India's pharma exports increased 10 per cent to $14.6 billion during 2012-13, with shipments to the US accounting for about 26 per cent of these exports.

India is the largest exporter of generic drug to the US by volume. It has around 320 USFDA-approved pharma facilities, the largest number outside the US.

The US Food and Drug Administration (USFDA) has taken a series of actions against Indian pharmaceutical firms, restricting their shipments to the US, their largest export market.